Cintas (CTAS) Downgraded by Zacks Investment Research to “Sell”

Zacks Investment Research downgraded shares of Cintas (NASDAQ:CTAS) from a hold rating to a sell rating in a research report sent to investors on Monday morning.

According to Zacks, “Over the past three months, Cintas’ shares looks overvalued compared to the industry. Transaction and integration expenses related to G&K Services acquisition, implementation cost associated with new enterprise resource planning system, typical conversion costs and rental material expenses might continue to hurt affecting the company’s margins in the upcoming quarters. Moreover, other headwinds such as price inflation in any major input like cotton or stiff industry rivalry remains causes of concern for the stock. Over the past 30 days, Zacks Consensus Estimate for the stock has remained unchanged for fiscal 2019 but has moved south for fiscal 2020. However, the stock has outperformed the industry over the past three-month period. “

A number of other equities analysts have also recently issued reports on the company. Morgan Stanley reiterated a sell rating and set a $178.00 target price (up previously from $164.00) on shares of Cintas in a report on Thursday, September 13th. Credit Suisse Group began coverage on Cintas in a report on Friday, August 10th. They set a neutral rating and a $205.00 target price for the company. Nomura restated a hold rating and issued a $188.00 price objective on shares of Cintas in a report on Sunday, July 22nd. Barclays raised their price objective on Cintas from $200.00 to $210.00 and gave the company an overweight rating in a report on Friday, July 20th. Finally, Robert W. Baird restated a buy rating and issued a $215.00 price objective on shares of Cintas in a report on Friday, July 20th. Two equities research analysts have rated the stock with a sell rating, six have issued a hold rating, six have issued a buy rating and two have assigned a strong buy rating to the company’s stock. The stock currently has an average rating of Buy and an average target price of $186.25.

CTAS stock opened at $211.11 on Monday. The stock has a market cap of $23.01 billion, a price-to-earnings ratio of 35.70, a PEG ratio of 2.49 and a beta of 0.98. The company has a debt-to-equity ratio of 0.84, a current ratio of 2.55 and a quick ratio of 2.19. Cintas has a 1 year low of $136.07 and a 1 year high of $217.34.

Cintas (NASDAQ:CTAS) last released its earnings results on Thursday, July 19th. The business services provider reported $1.77 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $1.67 by $0.10. The firm had revenue of $1.67 billion during the quarter, compared to analysts’ expectations of $1.64 billion. Cintas had a return on equity of 24.03% and a net margin of 13.01%. The company’s revenue was up 9.1% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.75 EPS. sell-side analysts forecast that Cintas will post 7.09 earnings per share for the current year.

Hedge funds and other institutional investors have recently made changes to their positions in the company. Toronto Dominion Bank grew its holdings in shares of Cintas by 19.7% in the 2nd quarter. Toronto Dominion Bank now owns 55,976 shares of the business services provider’s stock valued at $10,357,000 after acquiring an additional 9,199 shares in the last quarter. Raymond James Financial Services Advisors Inc. lifted its stake in Cintas by 30.4% in the 2nd quarter. Raymond James Financial Services Advisors Inc. now owns 11,262 shares of the business services provider’s stock valued at $2,084,000 after purchasing an additional 2,626 shares during the last quarter. Bessemer Group Inc. lifted its stake in Cintas by 12.6% in the 2nd quarter. Bessemer Group Inc. now owns 1,297,097 shares of the business services provider’s stock valued at $240,054,000 after purchasing an additional 145,128 shares during the last quarter. 1ST Source Bank acquired a new stake in Cintas in the 2nd quarter valued at about $201,000. Finally, Pitcairn Co. lifted its stake in Cintas by 10.2% in the 2nd quarter. Pitcairn Co. now owns 11,674 shares of the business services provider’s stock valued at $2,161,000 after purchasing an additional 1,084 shares during the last quarter. Institutional investors own 68.70% of the company’s stock.

Cintas Company Profile

Cintas Corporation provides corporate identity uniforms and related business services primarily in North America, Latin America, Europe, and Asia. It operates through Uniform Rental and Facility Services and First Aid and Safety Services segments. The company rents and services uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other ancillary items; and provides restroom cleaning services and supplies, and carpet and tile cleaning services, as well as sells uniforms directly.

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